Oil E&P stocks gain as crude oil prices regain strength

Key benchmark indices regained strength in mid-afternoon trade as European stocks edged higher in early trade. At 14:20 IST, the barometer index, the S&P BSE Sensex, was up 106.75 points or 0.41% at 25,889.52. The gains of the Nifty 50 index were higher than the Sensex's gains in percentage terms. The Nifty was currently up 41.10 points or 0.52% at 7,970.20.

The market breadth indicating the overall health of the market was negative. On BSE, 1,319 shares fell and 1,123 shares rose. A total of 182 shares were unchanged. The BSE Mid-Cap index was currently up 0.57%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.23%, underperforming the Sensex.

Shares of power generation and power distribution companies edged lower. Torrent Power (down 1.01%), GVK Power & Infrastructure (down 2.94%), NHPC (down 1.37%), Tata Power Company (down 0.15%), NTPC (down 1.1%), Adani Power (down 0.01%), Power Grid Corporation of India (down 1.11%), Reliance Infrastructure (down 2.44%) and Reliance Power (down 0.89%) declined.

Shares of state-run coal miner Coal India rose 0.75%.

Shares of oil production and exploration firms rose as global crude oil prices gained. Cairn India (up 3.35%), Reliance Industries (RIL) (up 0.83%), ONGC (up 0.44%) and Oil India (up 1.73%) gained. Higher crude oil prices would result in increase in realizations from crude sales for oil exploration firms.

Shares of public sector oil marketing companies also rose BPCL (up 1.29%), Indian Oil Corporation (IOCL) (up 0.05%) and HPCL (up 0.96%) edged higher.

In global commodities markets, Brent crude oil futures extended previous session's strong gains as the market priced in an expected output cut led by producer cartel, the Organization of the Petroleum Exporting Countries (OPEC). Brent for January settlement was up 16 cents at $49.06 a barrel. The contract had risen $2.04 a barrel or 4.36% to settle at $48.90 a barrel during previous trading session.

Bliss GVS Pharma rose 2.85% after Bliss GVS Healthcare, the Kenyan step down subsidiary of Bliss GVS Pharma, won a three year contract worth $111.40 million from Aon Kenya Insurance Brokers, for provision of Medical Healthcare Services in Kenya. The announcement was made during market hours today, 22 November 2016. This contract covers outpatient services for over 3.04 lakh members. This medical cover is to be managed by Aon Kenya Insurance Brokers will benefit the principle contributor, his/her spouse and up to four children, the company said.

Bliss GVS Pharma said the medical cover provides for dental, optical on an out-patient basis and for maternity. The service payments will be received by the company from Aon, in advance, on a quarterly basis, the company said. Part payment for the first quarter payment has been received by the company, it added.

In overseas stock markets, European and Asian stocks rose in the wake of impressive gains in US markets overnight. US stocks closed higher at fresh record highs yesterday, 21 November 2016, aided by a jump in oil prices and a pullback in the dollar, giving the indices their third simultaneous all-time closing highs this year. Global risk assets, led by US stocks and the dollar, have led gains since Republican Donald Trump's upset election win early this November. Expectations that Trump's administration will usher in expansionary fiscal policies have seen a dramatic selloff in US Treasuries and fueled a surge in the dollar.

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